Coralville City Council forums focus on city's debt

The $270 million question came right out of the gate.

With a campaign that thus far has focused on what group and what people are supporting which candidates, Coralville's nearly $270 million debt was topic No. 1 at a forum for Coralville City Council hopefuls Tuesday night

“This is just not sustainable,” challenger Dave Petsel, a restaurant owner, said of the city's debt.

The related issue of tax increment financing also was discussed a lot, and incumbent Bill Hoeft said Coralville's much-criticized use of it had helped the city become a retail leader in the state and add jobs.

“Tax increment financing is effectively the only viable economic development tool that a community in the state of Iowa has,” said Hoeft, a writer. “It is beneficial in a significant amount of ways.”

The eight candidates running for three City Council seats met at a forum sponsored by the League of Women Voters of Johnson County. They were followed by the four people running for mayor.

An overflow crowd of more than 100 people attended the back-to-back forums at City Hall.

The council candidates are: Hoeft, Petsel, incumbent Tom Gill and challengers Laurie Goodrich, Jean Newlin Schnake, Chris Turner, John Weber, and Mark Winkler.

Reports of area developers and outside political interests taking active roles in the city election have dominated much of the campaign thus far. The underlying issue with that is a debate that has raged the past two years over how Coralville conducts its business.

The candidates fell into two camps. Turner, Winkler and Petsel were critical of the city's financial practices and called for change. The other five said that while the debt needs to be paid down, the city is on the right track.

Winkler, director of the Business Solutions Center at the University of Iowa Tippie School of Business, made some of the same points Moody's Investors Service, which has downgraded Coralville's bond rating six notches since April 2012, has in its reports in saying the city's ownership stake in a golf course and a hotel put it at risk.

“I firmly believe government does not belong in non-essential services,” he said.

Even a question about collaboration with school boards and other cities got a response from Turner that touched on tax increment financing. In a TIF district, the increase in taxes is diverted from other tax-collecting bodies for a period of time. Turner, a UI researcher, said school district tax rates would be lower if that money went to them instead.

However, Gill, a dentist, said “TIF is working here” and the interest from outside groups in the election comes from “forces that don't want that to work.”

Schnake, a manager at an insurance company, said the city must reduce its debt while continuing to provide the services residents expect.

“It takes a balancing act and you can't just focus on one aspect,” she said.

Finances also dominated the mayoral forum. Running to replace longtime Mayor Jim Fausett are Matt Adam, David Kimm Fesler, Logan Strabala and current council member John Lundell.

Lundell, deputy director of the UI Injury Prevention Research Center, said any suggestion that Coralville is in a financial crisis is false.

“The situation we're in now has been planned and well planned, and there's a plan to pay it back,” he said, saying the debt is scheduled to be reduced by 50 percent in five years.

Adam, however, said it's hard to argue with an independent credit agency like Moody's. Like a homeowner, he said, getting too far in debt makes the city vulnerable and his role as mayor would be to work with council members to address the concerns.

“That should be the No. 1 focus: show the folks at Moody's that we have this under control,” said Adam, an attorney.